Mario,
I'm trying to keep this post JUST for the tips & tricks. Maybe we can start a Q&A post to go alongside it. As for your DJ question -- if you're serious, there is an entirely different school of thought when approaching entertainment as a DJ. I sometimes go out as one, and the mind set is distinctive to the craft.

First - One thing that's missing is the "personal" touch in each song, so the em-cee needs to add that on his/her own. I don't recommend talking over every number, but a little chatter can really help to open up a room.
Second - A lot of DJ's play too d*** loud. ( bands too ) Look at the size of the room, placement of the speakers, and age of the crowd. Factor all these in together and play accordingly. I like to make the host ask me to turn it UP, before they ask anything else!
Third - Develop your own collection of "specialty" songs. These are lifesavers at parties that need a jump start. Some guaranteed crowd pleasers STILL include:
*The electric slide
*The macarena
*Old time R&R
*Hot hot hot
*YMCA
*The chicken dance
*NYNY
* * * This list can go on for pages ..........
It doesn't matter if YOU'RE tired of hearing this stuff - it fills the dance floor and brings the crowd together. Take my advice and play the hits!

Soft, instrumental jazzy stuff is great during cocktails,.
Smooth big band ballads, and classic singers work great at dinner
(Sinatra, Bennett, Streisand, etc)
After dinner - Motown classics (like Temps, Tops, & Supremes) will ALWAYS get the floor crowded. Once the dance floor is active -- you "play the room"
Never do more than three of ANY type song in a row, always give the crowd a second chance at a dance they seem to respond to. Too many times, there is a handful of young girls hogging the floor, so the DJ will cater to them because it's fun to watch them dance.... but 100 others are SITTING at the tables! Next he plays a slow song, and the floor fills up, and right after ..... it's back to the modern tunes, and he loses the floor. Give 'em at least two chances if they respond to a certain type of song.
Mix it up -- use all the tricks in your bag - Cha Cha's, Disco, Swing - use it all!

Try not to avoid the younger set, but don't play the harder edge stuff that will be offensive to the older folks -- there are plenty of tunes that fall in the middle of the road, that the kids will love, and the old folks won't hate. This is important -- you never want to isolate any part of the crowd. Your job as an entertainer is to unite the crowd and provide a vehicle for them to enjoy the time together with. It's a privilege, and don't ever forget that performers are in the service business.